BELLSOUTH CORPORATION, еt al., Appellants, v. FEDERAL COMMUNICATIONS COMMISSION, Appellee. AT&T Corporation, et al., Intervenors.
No. 98-1019.
United States Court of Appeals, District of Columbia Circuit.
Argued Sept. 25, 1998. Decided Dec. 22, 1998.
Christopher J. Wright, General Counsel, Federal Communications Commission, argued the cause for appellee. With him on the briefs were Daniel M. Armstrong, Associate General Counsel, John E. Ingle, Deputy
David W. Carpenter argued the cause for intervenors AT&T Corporation, et al. With him on the briefs were Peter D. Keisler, Mark C. Rosenblum, Roy E. Hoffinger, Donald B. Verrilli, Jr., Anthony C. Epstein, Ian Heath Gershengorn, William Single, IV, Sue D. Blumenfeld, David P. Murray, Charles C. Hunter, Catherine M. Hannan, Daniel L. Brenner, Neal M. Goldberg, David L. Nicoll, Richard J. Metzger, Emily M. Williams, Genevieve Morelli, Robert J. Aamoth, Richard S. Whitt, Riley M. Murphy, Danny E. Adams, Brad E. Mutschelknaus, John J. Heitmann, Jonathan E. Canis and James J. Freeman. Theodore Whitehouse entered an appearance.
Joel I. Klein, Assistant Attorney General, U.S. Department of Justice, Philip D. Bartz, Acting Assistant Attorney General, Catherine G. O‘Sullivan, Nancy C. Garrison, Robert B. Nicholson, Mark B. Stern, Jacob M. Lewis, and Alisa B. Klein, Attorneys, were оn the briefs for intervenor United States of America.
William T. Lake, John H. Harwood, II and Robert B. McKenna were on the brief for intervenor US WEST, Inc.
Kenneth S. Geller, Donald M. Falk, Harold S. Reeves, Theodore A. Livingston and John E. Muench were on the brief for intervenor Ameritech Corporation.
Before: EDWARDS, Chief Judge, WALD and SENTELLE, Circuit Judges.
Opinion for the Court filed by Chief Judge EDWARDS.
Separate statement filed by Circuit Judge SENTELLE, concurring in the result.
HARRY T. EDWARDS, Chief Judge:
This petition for review represents yet another attack by BellSouth Corporation on the constitutionality of the Telecommunications Act of 1996 (the “Act“). Just this past term, BellSouth challenged the validity of
Once again, BellSouth claims that the challenged provision, here
We hold that
We also find that the FCC was correct in concluding that BellSouth is foreclosed from petitioning to provide service under
I. BACKGROUND
As we noted in BellSouth I, the Telecommunications Act of 1996,
A. The Telecommunications Market and the 1996 Act
In 1982, the American Telephone & Telegraph Company (“AT&T“) executed a consent decree, settling an antitrust suit brought by the Government in 1974. That decree, as modified by the District Court, is known as the Modification of Final Judgment (“MFJ“). United States v. American Tel. and Tel. Co., 552 F.Supp. 131 (D.D.C.1982), aff‘d sub nom. Maryland v. United States, 460 U.S. 1001, 103 S.Ct. 1240, 75 L.Ed.2d 472 (1983). The principal element of the MFJ was the requirement that AT&T divest itself of its local exchange monopolies. BellSouth‘s two local operating companies, Southern Bell Telephone and Telegraph Company and South Central Bell Telephone Company, were among the twenty-two BOCs spun off as a result of the decree. Each of the twenty-two BOCs were grouped into seven unaffiliated regional Bell operating companies (“RBOCs“). Due to mergers, there are now only five RBOCs, one of which is BellSouth.
The MFJ prohibited the BOCs from certain lines of business, including the provi-
Over the life of the MFJ, the District Court granted nearly 300 waivers easing the restrictions of the decree. A few of these waivers were related to the long distance service restriction, but they were limited to the provision of services such as paging, time-of-day information, toll-free services, 911 services, international services, and cellular services. However, no BOC ever successfully petitioned under the MFJ to provide long distance telephone services.
In 1996, Congress passed the Act, by which it sought to open all teleсommunications markets, including local telephone markets. To this end, many provisions of the Act were made generally applicable to incumbent local exchange carriers. For example,
A critical feature of the Act is found in
In addition to the Act‘s generally applicable provisions and the elimination of the future effects of the MFJ, Congress enacted
Section 271, the section at issue in this case, provides that the BOCs may immediately begin providing some categories of long distance services that were previously restricted under the MFJ. These services include “out-of-region” long distance services, i.e., long distance services originating outside the state(s) in which a BOC is authorized to provide local telephone service, and “incidental” long distance services, such as audio and video programming and commercial mobile services. See
In order to provide in-region long distance services, a BOC must first demonstrate that either
If a BOC satisfies either Track A or B, it must then show that it offers the items listed in
B. Procedural History
BellSouth filed an application on September 30, 1997 to provide in-region long distance services in South Carolina. See Order ¶ 1. It claimed that it had met the requirements of Track B as interpreted by the FCC in Application of SBC Cоmmunications Inc., Pursuant to Section 271 of the Communications Act of 1934, as amended, To Provide In-Region, InterLATA Services In Oklahoma, 12 F.C.C.R. 8685 (1997) (”Oklahoma Order“), aff‘d, SBC Communications v. FCC, 138 F.3d 410 (D.C.Cir.1998). See Order ¶ 52. It also contended that it had generally offered all fourteen checklist items. See Brief in Support of Application by BellSouth for Provision of In-Region, InterLATA Services in South Carolina at 17-57, reprinted in Joint Appendix 317-57.
The FCC denied BellSouth‘s application, because it found that qualifying requests had been made for the services in South Carolina. See Order ¶ 67. Accordingly, BellSouth was not eligible to proceed under Track B. See id. It also found that BellSouth did not generally offer all fourteen checklist items. See id. ¶ 240. BellSouth timely petitioned for review of the FCC‘s decision in this court on January 13, 1998.
C. Other Relevant Developments
Since BellSouth filed its appeal, three cases relevant to this appeal have been decided. On March 20, 1998, this court decided SBC Communications, denying SBC‘s petition to review the so-called Oklahoma Order. In that case, SBC sought review of the FCC‘s denial of its request to provide in-region long distance services in Oklahoma. SBC argued that it had satisfied Track A, because another entity was providing service to 20 customers in the region. SBC argued in the alternative that it had satisfied Track B. The FCC denied SBC‘s request, because it found that SBC had not satisfied either Track A or Track B.
This court denied SBC‘s petition to review the FCC‘s decisiоn, because it found that the other entity providing service in-region was doing so free of charge, and it was reasonable for the FCC to interpret “competing provider” in Track A to require an “actual commercial alternative to the BOC.” SBC Communications, 138 F.3d at 416 (internal quotation marks omitted). This court also found that SBC had not satisfied Track B. Particularly relevant to this case, this court approved the FCC‘s interpretation that “Track B was foreclosed the moment a provider requested interconnection so long as [the FCC] could predict that the carrier would, after implementing the agreement, provide competitive service to both residential and business customers, at least predominantly over its own facilities.” Id. at 417. Because SBC had received qualifying requests that satisfied the FCC‘s interpretation of Track B, it could not seek to provide long distance services under that track.
On May 15, 1998, this court decided BellSouth I, holding that
On September 4, 1998, the Fifth Circuit decided SBC Communications, Inc. v. FCC, 154 F.3d 226 (5th Cir.1998) (”SBC Communications (5th)“), in which SBC had argued that all of the Special Provisions of the Act,
In the light of these developments, we now review the FCC‘s denial of BellSouth‘s application to provide long distance services in South Carolina.
II. ANALYSIS
This appeal presents five issues, three of which concern the constitutionality of
A. Bill of Attainder
In our most recent bill of attainder case, BellSouth I, we addressed issues similar to those raised in this case. However, that decision dealt with
First,
As we explained in BellSouth I, when the Constitution was drafted, “bills of attainder” were acts that sentenced named persons to death without the benefit of a trial. See BellSouth I, 144 F.3d at 62. By the end of the nineteenth century, however, the Supreme Court had included penalties short of death among those prohibited by the bill of attainder clause. See id. Today, the prohibition against bills of attainder prevents any “legislative acts, no matter what their form, that apply either to named individuals or to easily ascertainable members of a group in such a way as to inflict punishment on them without a judicial trial.” United States v. Lovett, 328 U.S. 303, 315, 106 Ct.Cl. 856, 66 S.Ct. 1073, 90 L.Ed. 1252 (1946). Thus, under the most current interpretations of the bill of attainder clause, a law is prohibited if it (1) applies with specificity, and (2) imposes punishment.
As we made clear in BellSouth I, see 144 F.3d at 62-63, both of these elements must be present before we will find an unconstitutional bill of attainder. Indeed, the Supreme Court has required both specificity and punishment beforе it will find that a law constitutes a bill of attainder. In its most recent bill of attainder cases, Selective Service System v. Minnesota Public Interest Research Group, 468 U.S. 841, 851, 104 S.Ct. 3348, 82 L.Ed.2d 632 (1984), and Nixon v. Adminis-
The Court‘s jurisprudence on this point is hardly surprising, because
[l]egislative measures often grant or withhold benefits or burdens from precisely identified individuals or groups. A bailout for Chrysler might be seen as a burden to Ford, a subsidy to Lockheed as a competitive blow to Boeing, a private bill for a favored constituent as a severe disappointment to a neighbor, a tax break for one company as a punishment for a competitor. Yet thе bill of attainder ban has, quite properly, never been regarded as an obstacle to all such measures-a guarantee that all lawmaking activity will proceed through majestic generalities. Although the Supreme Court once struck down a statute exempting American Express by name from a generally applicable economic regulation, that decision was itself overruled two decades later, when the Court upheld a law permitting two identified vendors to continue hawking their wares in New Orleans’ French Quarter but forbidding all of their competitors to do so.
It is only laws that inflict punishment on legislatively specified individuals that the bill of attainder ban condemns, and the examples noted above make plain that not all burdens may be deemed punishments for this purpose even when legislative “specification” is shown.
LAURENCE H. TRIBE, AMERICAN CONSTITUTIONAL LAW § 10-5, 650-51 (2d ed.1988) (footnotes omitted).
In addition, we also note that, as in BellSouth I, both parties have assumed “that the Bill of Attainder Clause protects corporations as well as individuals.” BellSouth I, 144 F.3d at 63. Although we make the same assumption here, it is obvious that there are differences between a corporation and an individual under the law. Thus, any analogy between prior cases that have involved individuals and this case, which involves a corporation, must necessarily tаke into account this difference.
Turning to the first step in the bill of attainder analysis, there is no doubt that
The next question, then, is whether
(1) whether the challenged statute falls within the historical meaning of legislative punishment; (2) whether the statute, “viewed in terms of the type and severity of burdens imposed, reasonably can be said to further nonpunitive legislative purposes“; and (3) whether the legislative record “evinces a congressional intent to punish.”
Selective Service, 468 U.S. at 852, 104 S.Ct. 3348 (quoting Nixon, 433 U.S. at 473, 475-76, 478, 97 S.Ct. 2777). As we noted in BellSouth I, the second factor invariably appears to be “the most important of the three.” 144 F.3d at 65. However, in this case, we assign no particular weight to any of the three factors, because we find that none of the three inquiries result in a finding that the challenged legislation constitutes punishment.
Our first inquiry under Selective Service and Nixon is whether
BellSouth made this same argument with respect to
Even leaving aside our analysis in BellSouth I, the Supreme Court has said that “[a] statute that leaves open perpetually the possibility of [overcoming a legislative restriction] does not fall within the historical meaning of forbidden legislative punishment.” Selective Service, 468 U.S. at 853, 104 S.Ct. 3348. BellSouth attempts to nullify this point by citing the Court‘s earlier opinion in Brown saying thаt “inescapability” is not “an absolute prerequisite to a finding of attainder.” 381 U.S. at 457 n. 32, 85 S.Ct. 1707. The Brown decision cited, as an example, the famous post-Civil War case, ex parte Garland, 71 U.S. (4 Wall.) 333, 18 L.Ed. 366 (1866), which involved a challenge to a statute requiring attorneys to swear that they had not participated in the rebellion against the Union before they could practice in federal court. See Brown, 381 U.S. at 447, 85 S.Ct. 1707. The Court in Garland struck down the provision as a bill of attainder, because it was found to be a “legislative act[] inflicting punishment on a specific group: ... lawyers who had taken part in the rebellion and therefore could not truthfully take the oath.” Id.
This case is a far cry from Garland and other such cases, however. Section 271 only requires that, in order to prevent the creation of monopolies, the BOCs must open their local telephone markets to competition. Thus, much like the statute in Selective Service, which simply required individuals to register for the draft before they would be eligible for financial aid,
For example, it would be patently absurd, we think, for an inorganic chemical manufacturing company to argue that because it must comply with environmental laws specific to that industry, Congress has “punished” it in violation of the bill of attainder clause. Leaving aside the nonpunitive purpose of such laws, it is clear that the environmental laws perpetually leave open the possibility that the company may still manufacture lawful products by simply employing the appropriate pollution control techniques or devices.
Furthermore, we note that the Supreme Court has approved other line-of-business restrictions without ever suggesting that the restrictions constituted “punishment.” See, e.g., FCC v. National Citizens Committee for Broad., 436 U.S. 775, 98 S.Ct. 2096, 56 L.Ed.2d 697 (1978) (upholding FCC rules banning broadcast licensee from owning newspaper in same market); Board of Governors of Fed. Reserve Sys. v. Agnew, 329 U.S. 441, 67 S.Ct. 411, 91 L.Ed. 408 (1947) (upholding conflict-of-interest statute that prevented employees of securities underwriting firms from simultaneously working for banks that belong to Federal Reserve System). Thus, we find that
2. Furthering Nonpunitive Purposes
As we noted in BellSouth I, even if a statute does not fall within the historical definition of punishment, our inquiry under the bill of attainder clause does not end. Instead, we must ensure that a nonpunitive legislative purpose is served by the legislation in order to prevent “Congress from circumventing the clause by cooking up newfangled ways to punish disfavored individuals or groups.” 144 F.3d at 65. Thus, we must now determine whether
Before we begin our analysis of
The Supreme Court has consistently looked to nonpunitive purposes when assessing whether a statute inflicts punishment. As early as 1889, the Court recognized that, even though employment bars were considered punitive in Cummings and Garland, a law that imposed certain requirements on individuals before they could practice medicine did not constitute a bill of attainder. See Dent v. West Virginia, 129 U.S. 114, 9 S.Ct. 231, 32 L.Ed. 623 (1889). In distinguishing the earlier cases of Cummings and Garland, the Court stated:
There is nothing in these decisions which supports the positions for which the plaintiff in error contends. They only determine, that one who is in the enjoyment of a right to preach and teach the Christian religion as a priest of a regular church, and one who has been admitted to practise the profession of the law, cannot be deprived of the right to continue in the exercise of their respective professions by the exaction from them of an oath as to their past conduct, respecting matters which have no connection with such professions. Between this doctrine and that for which the plaintiff in error contends there is no analogy or resemblance. The constitution of Missouri and the act of Congress in question in those cases were designed to deprive parties of their right to continue in their professions for past acts, or past expressions of desires and sympathies, many of which had no bearing upon their fitness to continue in their professions. The law of West Virginia was intended to secure such skill and learning in the profession of medicine that the community might trust with confidence those receiving a license under authority of the State.
Dent, 129 U.S. at 128, 9 S.Ct. 231.
The Court later found in Hawker v. New York, 170 U.S. 189, 197, 18 S.Ct. 573, 42 L.Ed. 1002 (1898), that a law prohibiting convicted felons from practicing medicine did not inflict punishment and therefore was not a bill of attainder. In so finding, the Court stated that “[t]he State is not seeking to further punish a criminal, but only to protect its citizens from physicians of bad character.” Id. at 196, 18 S.Ct. 573. The Court also noted that, although there may be alternate ways of determining good character, it was up to the legislature to make this decision:
It is no answer to say that this test of character is not in all cases absolutely certain, and that sometimes it works harshly. Doubtless, one who has violated the criminal law may thereafter reform and become in fact possessed of a good moral character. But the legislature has power in cases of this kind to make a rule of universal application, and no inquiry is permissible back of the rule to ascertain whether the fact of which the rule is made the absolute test does or does not exist.
The Court again embraced the point that burdensome regulation cannot simply be equated with punishment in De Veau v. Braisted, 363 U.S. 144, 160, 80 S.Ct. 1146, 4 L.Ed.2d 1109 (1960). In that case, the Court held that a statute prohibiting convicted felons from being officers of a waterfront union did not violate the bill of attainder clause:
Clearly, § 8 embodies no further implications of appellant‘s guilt than are contained in his 1920 judicial conviction; and so it manifestly is not a bill of attainder.... The question in each case where unpleasant consequences are brought to bear upon an individual for prior conduct, is whether the legislative aim was to punish that individual for past activity, or whether the restriction of the individual comes about as a relevant incident to a regulation of a present situation, such as the proper qualifications for a profession. No doubt is justified regarding the legislative purpose of § 8. The proof is overwhelming that New York sought not to punish ex-felons, but to devise what was felt to be a much-needed scheme of regulation of the waterfront, and for the effectuation of that scheme it became important whether individuals had previously been convicted of a felony.
Id. (citation omitted).
This court, too, has had occasion to determine whether certain legislation constituted forbidden punishment or legitimate, nonpunitive regulation. In Siegel v. Lyng, Siegel had been the President, Director, and majority shareholder of a company that was cited for flagrant and repeated violations of the Perishable Agricultural Commodities Act (“PACA“). See 851 F.2d at 413. Under that Act, someone who was formerly “responsibly connected” with a violator of the Act was barred from employment with any other licensee under the Act for one year. See id. at 414-15. The court found that this prohibition did not inflict “punishment” under the bill of attainder clause, see id. at 417, because there were legitimate justifications for the emplоyment bar:
This Court recently echoed Congress’ express purpose behind the PACA enforcement regime, including the employment restrictions: namely, that the Act‘s “special sanctions against dishonest or unreliable dealing” “help instill confidence in parties dealing with each other on short notice, across state lines and at long distances....” [Veg-Mix, Inc. v. United States Dep‘t of Agric., 832 F.2d 601, 604 (D.C.Cir.1987)]. This legislative and executive resolve to guarantee that PACA transactions by firms employing persons “responsibly connected” to disciplined licensees be conducted with easy-to-monitor, scrupulous compliance with the Act is ample justification for the temporary employment bar.
Id. at 418 (footnote omitted); see also Zwick v. Freeman, 373 F.2d 110, 119-20 (2d Cir.1967) (finding that the same PACA employment bar was not a bill of attainder).
Likewise, in Dehainaut v. Pena, 32 F.3d 1066, 1071-72 (7th Cir.1994), the Seventh Circuit was asked to determine the constitutionality of an Office of Personnel Management policy that indefinitely barred former air traffic controllers who had participated in a strike against the federal government from reemployment with the Federal Aviation Administration (“FAA“). The court found that the policy did not constitute a bill of attainder and, in so finding, the court specifically stated that:
Even where a fixed identifiable group--such as the fired controllers--is singled out and a burden traditionally associated with punishment--such as permanent exclusion from an occupation--is imposed, the enactment may pass scrutiny under bill of attainder analysis if it seeks to achieve legitimate and non-punitive ends and was not clearly the product of punitive intent. Put differently, “[t]he question in each case where unpleasant consequences are brought to bear upon an individual for prior conduct, is whether the legislative aim was to punish that individual for past activity, or whether the restriction of the individual comes about as a relevant incident to a regulation of a present situation, such as the proper qualifications for a profession.”
Here, by contrast, we find an adequate nexus between the restriction imposed and the legitimate governmental purpose. President Reagan determined that the intermingling of controllers who had been fired for striking with those who had replaced them would interfere with the safety and efficiency of the FAA‘s operations. Id. (citations omitted); see also 2 RONALD D. ROTUNDA & JOHN E. NOWAK, TREATISE ON CONSTITUTIONAL LAW: SUBSTANCE AND PROCEDURE § 15.9(c), at 476-77 (2d ed.1992) (“[W]henever the Court is confronted with the claim that legislation constitutes a bill of attainder, it must determine whether the designation of persons based on past conduct simply names individuals for punishment or whether the designation promotes a nonpunitive goal based on reasonable criteria over which the individual has some control.“); TRIBE, supra, § 10-5, at 655 (“Even measures historically associated with punishment--such as permanent exclusion from an occupation--have been otherwise regarded when the nonpunitive aims of an apparently prophylactic measure have seemed sufficiently clear and convincing.“).
Thus, even if the restrictions of
First,
The question of how best to achieve that goal ... was the subject of great debate. Some thought that the local and long-distance markets should be open to all competitors immediately. Others believed that the BOCs should have to wait until actual competition was introduced in their local markets before providing interLATA service, since it was claimed that the long-distance market is already competitive. As might be expected for an issue of this economic significance, an extended lobbying struggle ensued. The end product was a compromise between the competing factions.
States and localities were no longer to sanction local monopolies; they are now barred from “prohibiting the ability of any entity to provide ... intrastate telecommunications service.”
Second, it is clear that requiring the BOCs to comply with
The seven BOCs provide over 80% of local telephone service in the United States. Several hundred other carriers provide the balance of local service. While some competition has developed in the local business service and exchange access markets, local residential service remains a monopoly service.
H.R.REP. NO. 104-204, pt.1, at 49 (1995). And, as we found in BellSouth I, “[b]ecause the BOCs’ facilities are generally less dispersed than [those of other competitors], they can exercise bottleneck control over both ends of a telephone call in a higher fraction of cases than can [other competitors].” 144 F.3d at 67.
Furthermore, prior to the passage of the Act, the BOCs were subject to the MFJ because of their peculiar characteristics and assets, and it was perfectly proper for the legislature to look at the MFJ‘s findings as evidence of the BOCs’ dominance in the market. Thus, it was proper for the legislature to consider the prior judicial findings embodied in the MFJ, not because Congress seeks to punish the BOCs based on that decree, but, rather, because it hopes “to devise what [i]s felt to be a much-needed scheme of regulation” in the long distance services market. See De Veau, 363 U.S. at 160, 80 S.Ct. 1146. And, “for the effectuation of that scheme,” see id., it was important to treat the BOCs differently, because, as the District Court found in approving the MFJ, preventing the BOCs from providing long distance services was “clearly necessary to presеrve free competition in the interexchange market.” 552 F.Supp. at 188.
In addition, as we noted in BellSouth I, Congress may read the evidence before it in a different way than might this court or any other, so long as it remains clear that Congress was pursuing a legitimate nonpunitive purpose. See 144 F.3d at 66. In other words, it does not matter that Congress arguably could have enacted different legislation in an effort to open the long distance markets to competition. The main point here is that it cannot be legitimately “suggested that the risks of anticompetitive conduct were so feeble that no one could reasonably assert them except as a smoke screen for some invidious purpose (much less for the specific invidious purpose of ‘punishing’ the BOCs).” Id. And just as the Court in Hawker acknowledged that ex-felon status was “not in all cases [an] absolutely certain” test of character, “and that sometimes it works harshly,” 170 U.S. at 197, 18 S.Ct. 573, such a determination does not render legislation unconstitutional under the bill of attainder clause.
In sum, we find that
3. Legislative Intent To Punish
Finally, we briefly address the final prong of the punishment test: whether the legislative record indicates a legislative intent to punish. As we noted in BellSouth I, BellSouth must show “unmistakable evidence of punitive intent.” 144 F.3d at 67 (quoting Selective Service, 468 U.S. at 856 n. 15, 104 S.Ct. 3348). “[S]everal isolated statements” are not sufficient to evince punitive intent. See Selective Service, 468 U.S. at 856 n. 15, 104 S.Ct. 3348.
BellSouth again cites here, as it did in BellSouth I, the remarks of members of Congress that refer to the history of the BOCs and the breakup of AT&T. See Brief for Appellants at 28-29; Reply Brief for Appellants at 13-14 n.7. But, as we said in BellSouth I, the “few scattered remarks referring to anticompetitive abuses allegedly committed by the BOCs in the past” do not provide the kind of “‘smoking gun’ evidence of congressional vindictiveness.” 144 F.3d at 67. Furthermore, as we explained above, Congress was justified in considering the MFJ when drafting the 1996 Act. Thus, we find that BellSouth has failed to show the “unmistakable evidence of punitive intent” that is required under Selective Service.
In sum, we find that
4. The Beneficial Effects of § 271
The result that we are constrained to reach in this case makes sense in light of the history of the BOCs in the telecommunications industry. As the FCC points out,
BellSouth, however, argues that we should not compare the status of the BOCs under the MFJ in determining whether
[I]nsofar as MFJ restrictions are left in place pursuant to the decision of the D.C. Circuit [in United States v. Western Electric Co., 900 F.2d 283 (D.C.Cir.1990)], Congress has authority to lift such restrictions in whole or in part, replacing them with equivalent or less restrictive regulatory alternatives that single out the parties to the AT&T litigation, as an exercise of its authority under the Necessary and Proper Clause, Art. I, section 8, cl. 18, to “carr(y) into Execution” the powers of the Article III judiciary. Because such parties have already been singled out through enforcement activity of the executive branch, in litigation supervised by the judicial branch, Congress may likewise address its legislative substitute for the MFJ to those par-
ties in particular, again provided that it avoids imposing more burdensome restrictions, or restrictions that violate the first amendment.
Telecommunications Policy Act (Pt. 1): Hearings Before the Subcomm. on Communications and Finance of the House Comm. on Energy and Commerce, 101st Cong. 416 (1990) (testimony of Professor Laurence H. Tribe, Tyler Professor of Constitutional Law, Harvard Law School). Such a comparison appears reasonable, given that a common definition for “punish” is “to inflict injury or loss upon.” WEBSTER‘S THIRD INTERNATIONAL DICTIONARY 1843 (1993). And it is hard to imagine how
Although we acknowledge that it may at times be difficult to compare a party‘s status before and after the enactment of regulatory legislation to determine whether the legislation inflicts punishment, we nonetheless believe that such a comparison is relevant to our analysis. In this case, it is clear that
Section 271, at worst, provides the BOCs with the possibility of immediate entrance into the in-region long distance services market, by following a clearer path than that provided under the MFJ. As the Fifth Circuit pointed out, “the Special Provisions gave the BOCs a clear delineation of what they needed to do to achieve a lifting of all the old MFJ restrictions in the future--certainly a step up, from the BOCs’ perspective, from being under [the District Court‘s] perpetual supervision. It is perhaps for this reason that the BOCs have apparently consistently represented, outside of litigation, that they were pleased with the Act.” SBC Communications (5th), 154 F.3d at 244; see, e.g., BellSouth Reaction to President Clinton‘s Signing of the Telecommunications Act of 1996, PR Newswire, Feb. 8, 1996, available in WESTLAW, PRWIREPLUS database (reporting that BellSouth‘s Chairman applauded the Act and noted “bipartisan and industry wide support” for it). In short, as a qualitative matter, the BOCs are no worse off under
B. Equal Protection
BellSouth also argues that the application of
As the Court stated in FCC v. Beach Communications, Inc., 508 U.S. 307, 313, 113 S.Ct. 2096, 124 L.Ed.2d 211 (1993), “a statutory classification that neither proceeds along suspect lines nor infringes fundamental constitutional rights must be upheld against equal protection challenge if there is any reasonably conceivable state оf facts that could provide a rational basis for the classification.” As we found in BellSouth I, “the differential treatment of the BOCs and non-BOCs is neither suggestive of punitive purpose nor particularly suspicious.” 144 F.3d at 67. Nor does
As explained above, Congress clearly had a rational basis for singling out the BOCs, i.e., the unique nature of their control over their local exchange areas. See supra Part II.A.2. Thus, it was undoubtedly ra-
C. Separation of Powers Challenge
BellSouth next argues that
In Pennsylvania v. Wheeling and Belmont Bridge Co., 59 U.S. (18 How.) 421, 15 L.Ed. 435 (1855), the Court had entered a final judgment in 1851, ordering the private owner of a bridge across the Ohio River to either remove or raise a bridge because it obstructed traffic along the river. See id. at 429. After that decision, Congress passed legislation that made the bridge in question a post-road, which meant that the bridge could remain in place with no interference from navigation along the river. See id. The bridge was then destroyed by a storm. See id. at 422. When the owner began to rebuild the bridge, the state of Pennsylvania filed suit to prevent its reconstruction based on the Supreme Court‘s original finding that thе bridge was a nuisance. See id. Faced with this dilemma, the Court held that the legislation was not unconstitutional, because the injunctive remedy awarded in 1851 was “a continuing decree,” see id. at 431, and, thus, could be modified by Congress. As a result, the statute passed by Congress prevented the Court from enjoining the construction of the bridge. See id. at 431-32. Therefore, as the Fifth Circuit pointed out, “under [Wheeling], it has long been clear that Congress may change the law underlying ongoing equitable relief, even if, as in Wheeling itself, the change is specifically targeted at and limited in applicability to a particular injunction, and even if the change results in the necessary lifting of that injunction.” SBC Communications (5th), 154 F.3d at 245.
The Supreme Court recently revisited the separation of powers doctrine in Plaut. There, Congress had passed a statute that would have allowed cases alleging claims under the
The 1996 Act did not reopen a final judgment, but rather eliminated the prospective effects of the MFJ, and provided new restrictions to govern the future acts of the BOCs in its place, such as those found in
Moreover, BellSouth‘s argument appears to be the same argument that SBC made to the Fifth Circuit regarding separation of powers, i.e., “a not-too-well-defined argument that all of the problematic aspects of the Special Provisions--including particularly their specificity, their interference with the MFJ, and the near-punitive nature of the liability they impose--when added together somehow amount to a separation-of-powers violation that is greater than the sum of its parts.” SBC Communications (5th), 154 F.3d at 246. But in Plaut, the Court made clear that “[i]t makes no difference whatever to [the] separation-of-powers violation ... that it is not accompanied by an ‘almost’ violation of the Bill of Attainder Clause.” 514 U.S. at 239, 115 S.Ct. 1447; see SBC Communications (5th), 154 F.3d at 246. Thus, although BellSouth is troubled by the particularity with which
D. The Proceedings Under § 271(c)(1)(B)
BellSouth also argues that the FCC erred in finding that it was foreclosed from proceeding under
BellSouth argues that in order to foreclose Track B, a “competing provider must be taking reasonable steps toward implementation” of a request. Reply Brief for Appellants at 15; see Brief for Appellants at 33. This interpretation of Track B, contends BellSouth, is based on the statute as well as the Oklahoma Order. See Brief for Appellants at 33; Reply Brief for Appellants at 15-18. The FCC counters that there is no “reasonable steps” requirement under Track B; instead, the “reasonable steps” language in the Oklahoma Order was only used in a discussion of what might be considered when making a decision regarding subsequent, not initial, applications. See Brief for Appellee at 31-32; Oklahoma Order ¶ 58.
In SBC Communications, this court had the opportunity to determine what type of request forеclosed Track B. See 138 F.3d at 417-21. In that case, the FCC found that “Track B was foreclosed the moment a provider requested interconnection so long as [the FCC] could predict that the carrier would, after implementing the agreement, provide competitive service to both residential and business customers, at least predominantly over its own facilities.” Id. at 417. This court enforced the agency‘s interpretation of the Track B statute because “under [Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984)] we must give deference to the Commission‘s interpretation if it is a permissible reading,” and the court had “no doubt that [the FCC‘s interpretation] passes that test; indeed it may ... be the only reasonable interpretation.” Id. at 421. Notably, there is no mention of reasonable steps in this definition. Accordingly, the FCC need not find that a requesting provider has taken reasonable steps before Track B is foreclosed to a BOC; it must only be able to predict that a provider who requests interconnection would be able to provide competitive services “to both residential and business customers, at least predominantly over its own facilities.” Id. at 417.
BellSouth counters that this answer is illusory, because the agreements often lack implementation schedules. See Brief for Appellants at 36-37. But, as the FCC points out, “BOCs are not precluded from insisting that implementation schedules be included in interconnection agreements.” Brief for Appellee at 34-35; see SBC Communications, 138 F.3d at 420. Moreover, “[i]n any event, this argument does not really go to congressional purpose but rather to the adequacy of the remedy Congress provided.” SBC Communications, 138 F.3d at 420.
BellSouth never offered any evidence that it did not receive any qualifying requests; instead, it rested solely on evidence that no carrier had taken the reasonable steps it thought were necessary to constitute a qualifying request. See Order ¶¶ 65-67 (noting that BellSouth received requests from twenty-six carriers with signed interconnection agreements, only three of which BellSouth discussed in its application). Thus, we deny BellSouth‘s petition to review the FCC‘s decision, because it is clear that BellSouth failed to demonstrate that it is eligible to proceed under Track B.
E. Satisfaction of Certain Competitive Checklist Items Under § 271(c)(2)(B)
BellSouth also argues that the FCC erred in its application of the competitive checklist of
Because the FCC relied on BellSouth‘s failure to comply with the competitive checklist items only as an alternative ground for its denial of BellSouth‘s application, see Order ¶ 176, we see no reason to offer any opinion on the FCC‘s findings with respect to this issue.
III. CONCLUSION
For the reasons set forth above, we deny BellSouth‘s petition for review of the FCC‘s decision.
So ordered.
SENTELLE, Circuit Judge, concurring in the result:
As the majority opinion exhaustivеly sets forth, in the present appeal BellSouth mounts the same sort of constitutional attack on
As the majority today sets forth,
The Supreme Court has previously “announced a three part test to determine whether a statute imposes ‘punishment’ for purposes of the Bill of Attainder Clause“:
(1) whether the challenged statute falls within the historical meaning of legislative punishment; (2) whether the statute, viewed in terms of the type and severity of burdens imposed, reasonably can be said to further nonpunitive legislative purposes; and (3) whether the legislative record evinces a congressional intent to punish.
Id. at 72 (quoting Selective Service Sys. v. Minnesota Public Interest Research Group, 468 U.S. 841, 852, 104 S.Ct. 3348, 82 L.Ed.2d 632 (1984)). The limitations on the BOCs constitute punishment under that three-part test.
First, this line of business limitation embodied in
I find even less persuasive the majority‘s paralleling the line of business restrictions with regulatory restrictions applicable to entire industries. While it may be true as the majority argues that environmental laws specific to an industry do not constitute punishment, I do not see how this lessens or even affects the punitive nature of a restriction applicable not to a specific industry but rather to specific named individuals or corporations within an industry inapplicable to others in the same industry, whether or not similarly situated. Both punitive effect and specificity are necessary to render a legislative enactment an unconstitutional bill of attainder. Supreme Court precedent upholding regulatory restrictions (whether punitive or not) where specificity is lacking is inapposite. See, e.g., FCC v. National Citizens Committee for Broad., 436 U.S. 775, 98 S.Ct. 2096, 56 L.Ed.2d 697 (1978); Board of Governors of Fed. Reserve Sys. v. Agnew, 329 U.S. 441, 67 S.Ct. 411, 91 L.Ed. 408 (1947). In short, in my view, the first prong of the three-part test of bill of attainder status is plainly met.
Second, as to whether the statute furthers nоnpunitive legislative purposes, the laudable goal of opening the telecommunications industry to competition by deregulating the long distance market is not served by forbidding specific persons, whether natural or corporate, from competing on the same terms as
As to the third element of the Selective Service System test, that is, whether the legislative record evinces a congressional intent to punish, as I stated in my dissent in BellSouth I, while I think this “the least important” of the three factors, id. at 73, I think it amply met. The timing of the enactment along with its effect in undoing the termination of the prior judicial redress of the BOCs’ past conduct really leaves no doubt as to Congress‘s motive. Congress clearly had available to it “less burdensome alternatives” under which it could have addressed its “legitimate nonpunitive objectives” while refraining from singling out the BOCs for punitive legislative treatment. See Nixon v. Administrator of General Services, 433 U.S. 425, 482, 97 S.Ct. 2777, 53 L.Ed.2d 867 (1977).
For these reasons, were we writing on a clean slate I would vote to hold
I do not find that the BOCs’ other arguments concerning the equal protection component of the Fifth Amendment or the statute‘s inconsistency with the constitutional separation of powers change the result. The equal protection argument is simply the bill of attainder argument dressed in different clothes. The separation of powers argument is to me a powerful one, but one which cannot carry the day. While I would agree that by undoing the judicial decision on this same subject matter,